New Devolution Deal (Peterborough and Cambridgeshire): An Update

Posted by Paul Williams | Updated 2016-12-05

A new devolution deal for a Combined Authority (Peterborough and Cambridgeshire with directly-elected Mayor) appears to offer more money and greater local decision-making. On closer examination, it is a poor deal, introducing a new tier of local government, reducing democratic oversight and providing very little new money after administrative costs are taken into account.

Background

The possibility of a Devolution Deal for Cambridgeshire, Peterborough, Norfolk and Suffolk was first mooted by George Osborne in his budget speech in 2016. This quickly fell apart as an idea as the Council Leaders could not agree that this area made a sensible grouping. For the last few months officers and Leaders have been working on a Deal for the area covering Cambridgeshire and Peterborough. A proposal was firmed up during late Autumn and in late November all the local District and County Councils covering Cambridgeshire and Peterborough voted to move forward with the Devolution Deal.

A non-negotiable element was the direct election of a Mayor to lead the Combined Authority from next May. In return for having a Mayor, the Government has promised an extra £20 million a year for the next 30 years to be spent on local infrastructure plus an additional £170 million for new affordable homes (£70m in Cambridge, £100m in the rest of the area).

The cost

The set - up costs will be £1.5million, including a mayoral office and staff costing £881,000 per year. This will have to be paid each year from the so-called £20 million. In addition, the cost of the election (every four years) will be £765k.

The benefits

The package was ‘sold’ to the councillors on the basis that it will not only provide more money in the short term but will place us favourably for further deals in the future. We would also have the power of ‘leverage’ i.e. the possibility of taking out loans for infrastructure projects with the guarantee of regular repayments from our grant from central government.

The scope of the Mayor’s role

The headline is ‘to support economic growth, development of local infrastructure and jobs’. It looks as though this will mainly be in terms of housing, road and rail projects. For roads, mention is made of up-grading the A14/A142 junction, the A10 and the A47 as well as the Ely North junction. Reference is made also to Wyton, St. Neots, Wisbech Garden Town. For rail there will be new rolling stock, improvements on the Kings Lynn, Cambridge and London route.

In addition there is also to be the creation of a Peterborough University, a Peterborough Enterprise Zone, co-design with government of a National Work and Health programme, a skills and apprenticeship budget and further integration of local health and social care resources.

The disadvantages

The Lib Dems on all the constituent councils were clear that they felt the deal was flawed and that the additional layer of a new Combined Authority and an elected Mayor are unnecessary. The extra money sounds generous initially but when you allow for modest inflation over the next 30 years, deduct running costs and spread it over seven councils, it amounts to less than an extra 1% spending power. The prospect of today’s government pre-committing the next five governments seems unlikely. Indeed in the recent Autumn Statement, they said: The government will meet the commitments on public spending set out for this Parliament: including commitments to priority public services, to international development and defence, and to pensioners. The government will continue to constrain public spending in the next Parliament to reach a balanced budget and live within its means. The commitments itis able to make on protecting public spending priorities in the next Parliament will need to be determined in light of evolving prospects for the fiscal position. The government will do this at the next Spending Review.

The wish-list of schemes and projects got some councillors very excited but it is self-evident that, with every mile of dual carriage way costing about £15 million, it is self-evident that huge extra central government grants would be needed to bring these about. The small additional budget that the Mayor will have will not help to reduce the cuts to the routine public services that people have come to expect in recent years. The Mayor will have the power to raise his/her own precept but little is known yet about the constraints on that power.

We also were uneasy about the lack of scrutiny of the Mayor though some concessions have been achieved in getting cross-party representation on a scrutiny panel.

We fear that this Deal will disempower councillors in the lower tiers, will evade the greater public scrutiny that comes through the present system, will put more power into the hands of fewer people (probably of the same political party).

It could well be time for a more radical reorganisation of local government structures to abolish the current council arrangements for Peterborough, Cambridge City, the districts and the county and replace them with two unitary authorities. Please see a separate article about this on our website: www.huntslibdems.co.uk/localgovernmentfuture (to be uploaded shortly).

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